Straddle

The term “straddle” refers to the purchase of a put option and a call option that have the same strike price and time frame or date of expiry as the underlying investment.

• An options strategy known as a straddle involves purchasing both a put and a call option.
• Both options are bought using the same underlying securities and for the same expiration date and strike price.
• Only when the stock moves away from the strike price by more than the entire premium paid is the approach profitable.
• The trading range and anticipated volatility of security by the expiration date are implied by a straddle.
• When investing in highly volatile securities, this method works best since without significant price movement, the premiums for several options may easily surpass any possible gains.

Navigation

Analysis→ Straddle/Strangle Chart

Source

https://www.investopedia.com/terms/s/straddle.asp, https://www.investopedia.com/terms/s/strangle.asp )

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